etf landscape, industry highlights, end september 2010 stockholm/ppt/etf... · for professional...

ETF Landscape NASDAQ OMXJanuary 2011

FOR PROFESSIONAL INVESTORS. NOT FOR INVESTORS IN THE UNITED STATES OR CANADA.

Deborah Fuhr, Managing DirectorGlobal Head of ETF Research and Implementation StrategyPhone: +44 20 7668 4276 Email: [email protected]

FOR PROFESSIONAL INVESTORS. NOT FOR INVESTORS IN THE UNITED STATES OR CANADA. 2

ETFs and ETPs listed globally

At year end 2010, the global ETF industry had 2,459 ETFs with 5,554 listings and assets of US$1,311.3 Bn, from 136 providers on 46 exchanges around the world. This compares to 1,943 ETFs with 3,827 listings, assets of US$1,036.1 Bn from 108 providers on 41 exchanges at year end 2009.

Assets

• In 2010, assets have increased by 26.6% from US$1,036.1 Bn to US$1,311.3 Bn, which is greater than the 9.6% increase in the MSCIWorld Index in US dollar terms. This compares to a 45.7% increase in assets in 2009 from US$711.1 Bn to US$1,036.1 Bn. The five and ten year CAGR’s of global ETF AUM are 26.1% and 33.2% respectively.

• US$23.9 Bn of net new assets went into ETFs/ETPs in December 20101. US$22.5 Bn net inflows went into equity ETFs/ETPs, of which US$20.4 Bn went into ETFs/ETPs tracking developed market indices and US$2.1 Bn into ETFs/ETPs tracking emerging market indices. Fixed income ETFs/ETPs saw net outflows of US$1.8 Bn, where corporate and aggregate ETFs/ETPs saw net outflows of US$1.3 Bn and US$0.9 Bn respectively. ETFs/ETPs with commodity exposure saw net inflows of US$3.0 Bn, of which US$1.6 Bn went into ETFs/ETPs with precious metals exposure.

• US$169.4 Bn of net new assets went into ETFs/ETPs in 20101, compared to US$176.3 Bn net new assets in 2009. US$106.3 Bn net new asset flows into equity ETFs/ETPs in 2010 is greater than the US$69.1 Bn for all of 2009. Net new asset flows into ETFs/ETPs tracking developed market equity indices were US$64.2 Bn in 2010, above the US$34.6 Bn in 2009 and ETFs/ETPs tracking emerging market indices were greater at US$42.1 Bn in 2010 versus US$34.5 Bn in 2009. Fixed income ETF/ETP net new assets were US$37.7 Bn in 2010 versus US$54.3 Bn for 2009, and net new assets going into ETFs/ETPs with commodity exposure were down significantly fromUS$46.2 Bn in 2009 to US$22.7 Bn in 2010.

1. Global flows approximated by combining United States and European flows.Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).


ETFs and ETPs listed globally (continued)

ETFs

• In 2010, the number of ETFs increased by 26.6% with 593 new ETFs launched, while 77 ETFs were delisted. This compares to a 21.9%increase in the number of ETFs in 2009, when 426 new ETFs launched while 83 ETFs were delisted.

• There are currently plans to launch 1,097 new ETFs, compared to 818 at the end of 2009.

• The top 100 ETFs, out of 2,459, account for 63.1% of global ETF AUM, while 1,516 ETFs have less than US$100.0 Mn in assets,1,222 ETFs have less than US$50.0 Mn in assets and 418 ETFs have less than US$10.0 Mn in assets.

• 9 March 2010 marked the 20th anniversary of the first ETF globally, which was listed in Canada in 1990.

Trading volume

• In December 2010, the ETF average daily trading volume in US dollars decreased by 8.4% to US$46.4 Bn compared to December 2009.

ETF providers

• Globally, iShares is the largest ETF provider in terms of both number of products and assets, 473 ETFs and US$578.6 Bn respectively, reflecting 44.1% market share; State Street Global Advisors is second with 113 ETFs and US$190.7 Bn, 14.5% market share; followed by Vanguard with 65 ETFs and assets of US$148.5 Bn and 11.3% market share at year end 2010.

• The top three ETF providers, out of 136, account for 70.0% of global ETF AUM.

• 31 new providers entered the industry in 2010, launching their first ETFs, while three firms have exited the business and 40 firms plan to launch their first ETF in the future.

Exchanges

• In 2010, the number of exchanges with official listings has increased from 41 to 46.

1. Global flows approximated by combining United States and European flows.Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).


ETFs and ETPs listed globally (continued)

Index providers

• MSCI ranks first in terms of AUM and number of products tracking its benchmarks with assets of US$337.8 Bn and 389 ETFs, while Standard & Poor’s (S&P) ranks second with US$301.1 Bn and 315 ETFs, followed by Barclays Capital with US$111.2 Bn and 84 ETFs.

Mutual funds

• Globally, net sales of mutual funds (excluding ETFs) were minus US$139.7 Bn, while net sales of ETFs were positive US$140.3 Bn during the first ten months of 2010 according to Strategic Insight.

ETPs

• Additionally, there were 1,044 other Exchange Traded Products (ETPs)1 with 1,757 listings and assets of US$170.6 Bn from 54 providers on 22 exchanges. This compares to 729 ETPs, 1,029 listings and assets of US$119.7 Bn from 38 providers on 18 exchanges atyear end 2009.

ETFs and ETPs

• Combined, there were 3,503 products with 7,311 listings, assets of US$1,482.0 Bn from 168 providers on 50 exchanges aroundthe world. This compares to 2,672 products with 4,856 listings, assets of US$1,155.8 Bn from 132 providers on 45 exchanges atyear end 2009.

1. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an open-end investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds.

Data as at year end 2010. Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.


Global ETF and ETP asset growth

Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

Assets (US$ Bn) 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 YE-2010

ETF total $0.8 $1.1 $2.3 $5.3 $8.2 $17.6 $39.6 $74.3 $104.8 $141.6 $212.0 $309.8 $412.1 $565.6 $797.0 $711.4 $1,036.1 $1,311.3

ETF equity $0.8 $1.1 $2.3 $5.3 $8.2 $17.6 $39.6 $74.3 $104.7 $137.5 $205.9 $286.3 $389.6 $526.5 $730.2 $596.8 $841.6 $1,053.8

ETF fixed income $0.1 $0.1 $4.0 $5.8 $23.1 $21.3 $35.8 $59.9 $104.0 $167.0 $207.3

ETF commodity $0.0 $0.1 $0.3 $0.5 $1.2 $3.4 $6.3 $10.0 $25.6 $45.7

ETP total $2.0 $5.1 $3.9 $4.1 $6.3 $9.3 $15.9 $32.5 $54.6 $61.2 $119.7 $170.6

# ETFs 3 3 4 21 21 31 33 92 202 280 282 336 461 713 1,171 1,594 1,943 2,459

# ETPs 2 14 17 17 18 22 64 170 371 616 729 1,044

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Top 25 ETF providers around the world: ranked by AUM


YE-2010 YTD change

Provider#

ETFsAUM

(US$ Bn)%

total#

planned#

ETFs%

ETFsAUM

(US$ Bn)%

AUM % market

shareiShares 473 $578.6 44.1% 12 60 14.5% $89.7 18.3% -3.1%

State Street Global Advisors 113 $190.7 14.5% 35 6 5.6% $29.7 18.4% -1.0%

Vanguard 65 $148.5 11.3% 6 18 38.3% $56.5 61.4% 2.4%

Lyxor Asset Management 156 $53.3 4.1% 1 31 24.8% $7.0 15.0% -0.4%

db x-trackers 179 $49.2 3.8% 13 58 47.9% $11.8 31.7% 0.1%

PowerShares 130 $42.8 3.3% 49 5 4.0% $8.2 23.6% -0.1%

ProShares 100 $21.6 1.6% 101 22 28.2% -$1.6 -7.0% -0.6%

Van Eck Associates Corp 29 $20.0 1.5% 31 6 26.1% $7.5 60.2% 0.3%

Nomura Asset Management 32 $16.4 1.3% 0 2 6.7% $3.1 22.9% 0.0%

Credit Suisse Asset Management 54 $15.6 1.2% 2 27 100.0% $6.0 62.1% 0.3%

Bank of New York 1 $12.2 0.9% 0 0 0.0% $3.6 42.2% 0.1%

Zurich Cantonal Bank 7 $11.8 0.9% 0 3 75.0% $5.1 76.3% 0.3%

WisdomTree Investments 44 $9.9 0.8% 72 -8 -15.4% $3.5 53.5% 0.1%

Commerzbank 90 $8.6 0.7% 0 28 45.2% $2.4 38.1% 0.1%

HSBC/Hang Seng 17 $7.4 0.6% 10 10 142.9% $1.7 30.3% 0.0%

Amundi ETF 92 $7.2 0.5% 0 29 46.0% $2.4 50.1% 0.1%

Daiwa Asset Management 23 $6.9 0.5% 1 0 0.0% $1.9 39.4% 0.0%

ETFlab Investment 35 $6.8 0.5% 0 4 12.9% -$0.3 -4.1% -0.2%

Direxion Shares 39 $6.6 0.5% 172 13 50.0% $1.6 30.9% 0.0%

Nikko Asset Management 17 $6.6 0.5% 0 7 70.0% $0.8 14.3% -0.1%

UBS Global Asset Management 29 $6.6 0.5% 0 15 107.1% $3.0 86.2% 0.2%

EasyETF 49 $5.5 0.4% 1 -15 -23.4% -$0.3 -5.3% -0.1%

Claymore Investments 29 $5.5 0.4% 6 5 20.8% $2.2 68.0% 0.1%

First Trust Advisors 43 $5.4 0.4% 7 3 7.5% $3.4 169.3% 0.2%

Rydex SGI 24 $5.0 0.4% 96 -7 -22.6% $1.9 62.7% 0.1%


Global ETF/ETP net new assets by type of exposure

Global ETF/ETP NNA approximated by combining United States and European flows. NNA – Net New Assets. Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

continued…

Nov-10

Exposure# ETFs/ETPs

ADV(US$ Mn)

Assets (US$ Mn)

Equity 1,567 40,779.6 945,115.9 22,500.0 106,319.0 69,099.1 Developed markets - equity 1,335 35,189.6 752,179.4 20,357.2 64,233.6 34,594.3

North America - equity 555 31,425.5 507,190.8 16,480.6 41,795.4 3,548.4 Asia Pacific - equity 86 519.3 35,493.6 1,222.1 4,922.6 4,487.8 EMEA - equity 494 2,067.1 121,471.3 1,422.7 8,665.3 19,714.7 Global - equity 130 196.9 25,613.3 443.8 4,156.6 6,152.0 Global (ex-US) - equity 70 980.9 62,410.4 788.0 4,693.7 691.4

Emerging markets - equity 232 5,590.0 192,936.5 2,142.8 42,085.4 34,504.9 Broad - EM 65 3,070.4 121,903.3 1,058.0 32,996.2 20,356.3 Regional - EM 33 129.0 9,196.3 471.3 1,235.2 2,179.5 Country - EM 134 2,390.6 61,836.8 613.6 7,853.9 11,946.6

Brazil 18 889.9 16,128.9 87.1 1,253.6 3,356.8 Chile 2 15.1 1,059.1 23.3 528.1 50.1 China 33 643.5 14,001.1 (180.7) (1,185.0) 3,054.0 Colombia 1 4.0 170.1 (15.0) 158.2 5.3 Egypt 1 0.1 11.1 (11.3) (0.2) (5.2) Hungary 1 0.0 16.3 - (0.6) (0.3) India 15 110.7 6,979.8 25.7 1,699.2 1,390.9 Indonesia 2 20.2 941.5 (51.7) 600.7 167.5 Kuwait 1 0.9 53.9 (1.5) 14.6 14.5 Malaysia 2 23.0 1,131.4 (20.2) 324.8 71.1 Mexico 5 117.9 1,768.8 65.0 330.1 302.0 Peru 1 13.5 551.4 14.7 299.8 96.3 Philippines 1 0.9 16.2 3.6 16.0 Poland 3 3.8 239.2 1.6 209.8 7.3 Russia 12 144.3 5,045.2 524.2 1,911.7 552.9 South Africa 6 24.3 1,047.2 (8.2) 123.1 82.7 South Korea 7 149.6 5,461.4 (125.9) 825.7 922.9 Taiwan 7 144.4 4,258.7 241.0 (396.2) 1,231.4 Thailand 1 11.5 694.6 (9.6) 280.0 169.2 Turkey 13 60.5 1,672.5 (11.3) 516.6 318.0 UAE 0 0.0 0.0 (0.8) (13.2) 7.2 Vietnam 2 12.6 588.5 63.6 357.2 151.8

Dec-10

2010 NNA(US$ Mn)

2009 NNA(US$ Mn)

NNA (US$ Mn)


Global ETF/ETP net new assets by type of exposure (continued)

Global ETF/ETP NNA approximated by combining United States and European flows. NNA – Net New Assets. Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, National Stock Exchange (NSX).

Exposure# ETFs/ETPs

ADV(US$ Mn)

Assets (US$ Mn)

Fixed income 333 3,478.7 193,849.3 (1,797.0) 37,700.6 54,255.3 Broad 2 4.3 551.4 76.3 460.5 102.3 Active 6 13.5 849.9 (56.5) 798.7 48.8 Aggregate 11 256.4 29,120.0 (895.3) 5,039.0 8,216.7 Corporate 37 311.1 36,777.1 (1,328.7) 7,445.6 15,331.5 Convertible 1 5.3 537.8 64.3 271.7 212.0 Covered 8 3.9 1,019.0 (17.7) 360.3 438.4 Credit spreads 13 8.4 873.7 (65.3) (25.3) (291.1) Government 182 2,375.3 65,567.9 312.6 15,313.3 12,900.1 High yield 5 171.5 14,634.7 812.9 6,085.0 4,429.4 Inflation 24 132.2 25,850.3 (345.2) 738.1 12,505.6 Money market 13 81.5 6,643.7 (53.5) (999.2) (4,518.2) Mortgage 4 26.6 3,941.3 (29.5) 500.6 1,305.2 Municipal 27 88.7 7,482.4 (271.4) 1,712.7 3,574.6

Commodities 606 4,362.1 175,976.6 3,005.8 22,694.2 46,209.7 Broad 92 182.4 20,392.6 603.0 2,502.2 7,944.0 Agriculture 133 153.1 11,382.6 559.6 (38.9) 3,221.8 Energy 122 450.6 11,437.9 (164.0) (443.1) 7,890.1 Industrial metals 95 66.7 4,028.8 366.2 751.4 1,141.5 Livestock 24 2.0 193.4 (7.2) (22.4) 48.3 Precious metals 140 3,507.4 128,541.4 1,648.1 19,945.1 25,963.8

Currency 114 366.3 6,599.2 (18.0) (1,825.0) 4,345.6 Alternative 27 387.0 4,028.7 172.8 4,062.4 2,157.2 Mixed 26 8.3 1,014.0 44.0 477.2 240.3

Total 2,673 49,382.0 1,326,583.7 23,907.6 169,428.5 176,307.2

Dec-10

2010 NNA(US$ Mn)

2009 NNA(US$ Mn)

NNA (US$ Mn)


Index providers worldwide: ranked by AUM


YE-2010 YTD change

Index provider#

ETFsAUM

(US$ Bn)%

total#

ETFsAUM

(US$ Bn)%

AUM

MSCI 389 $337.8 25.8% 124 $94.1 38.6%S&P 315 $301.1 23.0% 82 $51.9 20.8%Barclays Capital 84 $111.2 8.5% 14 $23.7 27.1%Russell 70 $80.5 6.1% 9 $14.5 22.0%FTSE 161 $54.9 4.2% 36 $12.2 28.6%STOXX 221 $48.7 3.7% 17 -$2.3 -4.4%Dow Jones 138 $47.6 3.6% 2 $6.6 16.2%Markit 112 $45.1 3.4% 42 $6.9 18.1%Deutsche Boerse 45 $32.0 2.4% 15 $8.6 36.5%NASDAQ OMX 61 $31.7 2.4% 18 $5.2 19.7%NYSE Euronext 41 $16.6 1.3% 6 $2.1 14.8%Topix 53 $16.6 1.3% 0 $4.1 33.4%Hang Seng 13 $15.3 1.2% 4 $3.5 29.7%Nikkei 9 $14.7 1.1% 1 $2.2 17.4%EuroMTS 29 $9.5 0.7% 7 -$1.5 -14.0%SIX Swiss Exchange 17 $9.0 0.7% 4 $1.6 21.9%WisdomTree 35 $8.5 0.6% -10 $2.7 46.2%PC-Bond 18 $7.7 0.6% 6 $2.3 42.7%Indxis 6 $5.8 0.4% -1 $3.0 108.5%CSI 31 $3.6 0.3% 20 $1.1 46.0%Intellidex 36 $2.8 0.2% -6 $0.3 10.0%BNY Mellon 16 $2.6 0.2% 5 $0.3 13.0%Morningstar 10 $1.9 0.1% 0 $0.2 14.5%S-Network 15 $1.7 0.1% 2 $0.5 43.0%Zacks 11 $0.8 0.1% -3 $0.2 40.0%Value Line 3 $0.3 0.0% -2 $0.0 5.7%Other 520 $103.4 7.9% 124 $31.1 43.0%Total 2,459 $1,311.3 100.0% 516 $275.3 26.6%

MSCI 25.8%S&P 23.0%Barclays Capital 8.5%Russell 6.1%FTSE 4.2%STOXX 3.7%Dow Jones 3.6%Markit 3.4%Deutsche Boerse 2.4%NASDAQ OMX 2.4%NYSE Euronext 1.3%Topix 1.3%Hang Seng 1.2%Nikkei 1.1%EuroMTS 0.7%SIX Swiss Exchange 0.7%WisdomTree 0.6%PC-Bond 0.6%Indxis 0.4%CSI 0.3%Intellidex 0.2%BNY Mellon 0.2%Morningstar 0.1%S-Network 0.1%Zacks 0.1%Value Line 0.0%Other 7.9%


ETFs and ETPs listed in Europe

At year end 2010, the European ETF industry had 1,071 ETFs with 3,699 listings and assets of US$284.0 Bn, from 39 providers on22 exchanges. This compares to 827 ETFs with 2,438 listings and assets of US$226.9 Bn, from 34 providers and 19 exchanges atyear end 2009.

Assets

• In 2010, assets have increased by 25.2% from US$226.9 Bn to US$284.0 Bn, which is greater than the 0.8% increase in the MSCI Europe Index in US dollar terms. This compares to a 59.0% increase in assets in 2009, from US$142.7 Bn to US$226.9 Bn. The five and ten year CAGR’s of European ETF AUM are 38.9% and 83.0% respectively.

• US$4.9 Bn of net new assets went into European listed ETFs/ETPs in December 2010. US$3.8 Bn net inflows went into equity ETFs/ETPs, of which US$1.5 Bn went into ETFs/ETPs tracking emerging market indices and US$1.4 Bn into ETFs/ETPs tracking European indices. Fixed income ETFs/ETPs saw net outflows of US$0.1 Bn, of which corporate bond ETFs/ETPs saw net outflows ofUS$0.4 Bn while US$0.3 Bn went into government bond ETFs/ETPs. Commodity ETFs/ETPs saw net inflows of US$1.1 Bn, of which US$0.6 Bn went into precious metals exposure and US$0.4 Bn into broad commodity exposure.

• US$50.2 Bn of net new assets went into European listed ETFs/ETPs in 2010, compared to US$56.8 Bn in 2009. Equity ETFs/ETPs saw US$31.5 Bn net inflows, of which US$12.3 Bn went into ETFs/ETPs tracking emerging market indices and US$7.8 Bn into ETFs/ETPstracking European indices. Fixed income ETFs/ETPs saw US$8.3 Bn net inflows, of which US$5.7 Bn went into government bond ETFs/ETPs and US$2.4 Bn into corporate bond ETFs/ETPs. Commodity ETFs/ETPs saw US$9.4 Bn net inflows, of which US$7.2 Bn went into precious metals exposure ETFs/ETPs and US$1.7 Bn into broad commodity exposure ETFs/ETPs in 2010.

• In 2010, US$31.5 Bn net new asset flows into equity ETFs/ETPs were less than the US$32.6 Bn for all of 2009. Net new asset flows into ETFs/ETPs tracking emerging market indices were US$12.3 Bn in 2010, greater than the US$7.5 Bn in 2009. ETFs/ETPs tracking European indices net inflows were smaller at US$7.8 Bn in 2010 versus US$18.1 Bn in 2009. Fixed income ETF/ETP net new assetswere US$8.3 Bn in 2010 versus US$9.5 Bn for 2009, and net new assets going into commodity ETFs/ETPs were down from US$13.7 Bnin 2009 to US$9.4 Bn in 2010.

Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Federation of European Stock Exchanges (FESE).


ETFs and ETPs listed in Europe (continued)

ETFs• In 2010, the number of ETFs increased by 29.5% with 268 new ETFs launched, while 24 ETFs were delisted. This compares to a 30.0%

increase in 2009 with 220 new ETFs launched, while 30 ETFs were delisted.• The top 100 ETFs, out of 1,071, account for 65.0% of European ETF AUM, while 678 ETFs have less than US$100.0 Mn in assets,

543 ETFs have less than US$50.0 Mn in assets and 171 ETFs have less than US$10.0 Mn in assets.• 11 April 2010 marked the 10th anniversary of ETFs in Europe.

Trading volume• In December 2010, the ETF average daily trading volume in US dollars increased by 19.9% to US$3.2 Bn compared to December 2009.

Most ETF trades are not required to be reported in Europe as ETFs are not covered by the European Union directive on markets in financial instruments (MiFID).

• In November 2010, reported European ETF turnover was 5.7% of all European equity turnover, greater than the 4.5% in December 2009.Exchanges

• In 2010, the number of exchanges with official listings has increased from 19 to 22.ETF providers

• iShares is the largest ETF provider in terms of both number of products and assets, 181 ETFs and US$101.8 Bn respectively, reflecting 35.8% market share; Lyxor Asset Management is second with 154 products and US$52.4 Bn, 18.4% market share; followed by db x-trackers with 152 ETFs, assets of US$47.9 Bn and 16.9% market share at year end 2010.

• Of the US$4.5 Bn of net new assets in European listed ETFs in December 2010, Lyxor Asset Management gathered the largest net inflows with US$1.8 Bn, followed by iShares with US$1.3 Bn net inflows, while Source Markets had the largest net outflowswith US$0.7 Bn.

• In 2010, of the US$45.7 Bn of net new assets in European listed ETFs, iShares gathered the largest net inflows with US$13.3 Bn net new assets, followed by db x-trackers with US$8.0 Bn net inflows, and Lyxor Asset Management with US$6.8 Bn net inflows in 2010.

• The top three ETF providers, out of 39, account for 71.1% of European ETF AUM.• In 2010, seven new providers entered the industry, launching their first ETFs, while one firm exited the business and three firms plan to

launch their first ETF in the future.Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg, Federation of European Stock Exchanges (FESE).


ETFs and ETPs listed in Europe (continued)

Mutual funds

• In Europe, net sales of mutual funds (excluding ETFs) were US$162.7 Bn, while net sales of ETFs domiciled in Europe were US$36.5 Bn during the first ten months of 2010 according to Lipper FMI.

ETPs

• Additionally, there were 521 other Exchange Traded Products (ETPs)¹ with 1,163 listings, and assets of US$31.3 Bn, from nine providers on eight exchanges. This compares to 278 ETPs with 547 listings and assets of US$15.7 Bn, from four providers on six exchanges at year end 2009.

ETFs and ETPs

• Combined, there were 1,592 products with 4,862 listings and assets of US$315.3 Bn, from 44 providers on 23 exchanges in Europe.This compares to 1,105 products with 2,985 listings and assets of US$242.6 Bn, at year end 2009.

1. ETPs are products that have similarities to ETFs in the way they trade and settle but they do not use an open-end investment company structure. The use of other structures including grantor trusts, partnerships, notes and commodity pools by ETPs can create different tax and regulatory implications for investors when compared to ETFs which are funds.



European ETF and ETP asset growth


Assets (US$ Bn) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 YE-2010

ETF total $0.7 $5.7 $10.7 $20.4 $34.0 $54.9 $89.7 $128.5 $142.7 $226.9 $284.0

ETF equity $0.7 $5.7 $10.7 $19.4 $31.0 $49.3 $75.7 $103.5 $96.6 $159.8 $198.5

ETF fixed income $1.0 $2.9 $5.2 $12.1 $21.0 $41.1 $51.6 $57.1

ETF commodity $0.4 $2.0 $3.3 $4.9 $15.2 $26.4

ETP total $1.1 $2.1 $4.9 $7.0 $15.7 $31.3

# ETFs 6 71 118 104 114 165 273 423 636 827 1,071

# ETPs 2 32 80 218 278 521

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ETF providers in Europe: ranked by AUM

YE-2010 Dec-10NNA

(US$ Bn)

2010 NNA

(US$ Bn)

YTD change

Provider#

ETFs# total

listingsAUM

(US$ Bn)%

total#

planned#

ETFs%

ETFsAUM

(US$ Bn)%

assets% market

shareiShares 181 788 $101.8 35.8% 2 $1.3 $13.3 13 7.7% $16.0 18.7% -2.0%

Lyxor Asset Management 154 626 $52.4 18.4% 0 $1.8 $6.8 31 25.2% $6.8 14.9% -1.7%

db x-trackers 152 631 $47.9 16.9% 13 -$0.4 $8.0 36 31.0% $10.7 28.7% 0.5%

Credit Suisse Asset Management 54 229 $15.6 5.5% 2 $0.4 $4.5 27 100.0% $6.0 62.1% 1.3%

Zurich Cantonal Bank 7 12 $11.8 4.2% 0 $0.2 $2.1 3 75.0% $5.1 76.3% 1.2%

Commerzbank 90 362 $8.6 3.0% 0 $0.2 $2.1 28 45.2% $2.4 38.1% 0.3%

Amundi ETF 92 264 $7.2 2.5% 0 $0.3 $2.2 29 46.0% $2.4 50.1% 0.4%

ETFlab Investment 35 69 $6.8 2.4% 0 $0.7 $0.6 4 12.9% -$0.3 -4.1% -0.7%

UBS Global Asset Management 29 131 $6.6 2.3% 0 $0.3 $2.7 15 107.1% $3.0 86.2% 0.8%

EasyETF 49 84 $5.5 2.0% 0 -$0.3 -$0.5 -15 -23.4% -$0.3 -5.3% -0.6%

Source Markets 55 55 $5.0 1.7% 16 -$0.7 $1.3 23 71.9% $2.1 75.0% 0.5%

Swiss & Global Asset Management 16 32 $4.2 1.5% 0 $0.1 $1.1 12 300.0% $2.1 101.8% 0.6%

XACT Fonder 21 29 $3.2 1.1% 0 $0.1 $0.2 9 75.0% $0.6 22.0% 0.0%

RBS 10 55 $1.4 0.5% 21 $0.2 $0.4 0 0.0% $0.6 80.6% 0.1%

PowerShares 19 66 $1.3 0.4% 1 $0.0 $0.1 0 0.0% $0.3 28.0% 0.0%

BBVA Asset Management 8 8 $1.1 0.4% 0 $0.0 $0.0 0 0.0% -$1.2 -51.9% -0.6%

State Street Global Advisors 13 38 $1.1 0.4% 0 $0.0 -$0.4 0 0.0% -$0.4 -26.6% -0.3%

ETF Securities 26 108 $0.8 0.3% 3 $0.1 $0.4 5 23.8% $0.4 139.1% 0.1%

HSBC/Hang Seng 13 45 $0.6 0.2% 9 $0.1 $0.5 10 333.3% $0.6 694.4% 0.2%

Marshall Wace LLP 3 4 $0.3 0.1% 0 $0.0 $0.3 3 100.0% $0.3 100.0% 0.1%

Seligson & Co Fund Management 1 1 $0.3 0.1% 0 $0.0 $0.0 0 0.0% $0.0 7.8% 0.0%

DnB NOR Asset Management 3 5 $0.3 0.1% 0 $0.0 $0.0 0 0.0% $0.0 -13.1% 0.0%

Finans Portfoy Yonetimi 7 7 $0.1 0.0% 0 $0.0 $0.0 1 16.7% $0.0 -15.9% 0.0%

JP Morgan Mansart Investments 6 12 $0.1 0.0% 0 $0.0 -$0.1 0 0.0% -$0.1 -49.3% 0.0%

continued…


European ETF/ETP net new assets by type of exposure

NNA – Net New Assets. Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

continued…

Exposure# ETFs/ETPs

ADV(US$ Mn)

Assets (US$ Mn)

Equity 801 2,684.0 199,206.1 3,805.8 31,472.3 32,622.8 Europe - equity 466 1,853.6 111,353.8 1,355.1 7,831.0 18,140.7

Broad 287 1,471.9 98,134.1 1,872.1 7,538.9 14,753.7 Consumer goods/services 41 46.9 1,828.1 106.7 162.7 335.4 Energy 13 27.9 1,091.9 (49.2) 12.4 322.1 Financials 28 118.0 2,668.5 (44.7) (9.6) 825.5 Healthcare 12 10.6 981.1 (43.6) (139.5) 145.9 Industrials 13 23.7 640.1 (40.4) 28.4 136.6 Information technology 12 6.5 377.0 (30.1) (33.1) 12.4 Materials 21 116.1 1,966.1 (319.0) (91.5) 522.5 Private equity 1 1.8 138.8 4.0 64.4 34.2 Real Estate 12 8.0 1,959.8 9.8 479.3 333.6 Telecommunications 11 9.6 764.1 (119.9) (192.1) 425.0 Utilities 11 11.9 747.3 9.7 11.9 361.3 Other 4 0.5 56.9 (0.2) (1.3) (67.4)

North America - equity 81 160.0 21,548.8 516.7 4,794.8 1,561.5 Asia Pacific - equity 59 103.8 13,698.9 453.9 3,691.5 2,662.0 Global - equity 75 100.1 13,372.5 27.7 2,873.9 2,798.3

NNA (US$ Mn)

2010 NNA(US$ Mn)

2009 NNA(US$ Mn)

Dec-10


European ETF/ETP net new assets by type of exposure (continued)


continued…

Exposure# ETFs/ETPs

ADV(US$ Mn)

Assets (US$ Mn)

Emerging markets - equity 120 466.5 39,232.2 1,452.4 12,281.1 7,460.3 Broad - EM 27 184.7 19,535.9 1,070.9 7,450.2 3,665.0 Regional - EM 21 45.5 4,005.1 265.7 965.9 778.8 Country - EM 72 236.3 15,691.1 115.8 3,865.1 3,016.6

Brazil 9 34.4 2,809.8 37.4 302.4 811.2 Chile 1 0.6 44.2 - 41.8 - China 11 30.2 3,393.5 (2.6) 427.1 862.9 Egypt - - - (13.2) (9.0) (5.2) Hungary 1 0.0 16.3 - (0.6) (0.3) India 8 34.3 3,258.2 (46.9) 690.6 616.3 Indonesia - 0.9 - - - - Kuwait 1 0.9 53.9 (1.5) 14.6 14.5 Malaysia 1 3.6 145.7 11.1 99.0 10.1 Mexico 2 0.8 48.9 4.4 41.8 - Poland 1 0.3 85.7 - 77.5 - Russia 9 42.3 2,272.4 192.4 951.8 174.2 South Africa 5 5.8 345.2 12.9 87.5 64.3 South Korea 5 26.1 1,201.5 (120.2) 488.9 152.3 Taiwan 5 12.0 797.3 45.7 252.5 137.7 Thailand - 0.0 - - - (5.5) Turkey 12 39.4 881.3 (34.5) 215.1 113.3 UAE - - - (0.8) (13.2) 7.2 Vietnam 1 4.8 337.1 31.6 197.4 63.6

NNA (US$ Mn)

2010 NNA(US$ Mn)

2009 NNA(US$ Mn)

Dec-10


European ETF/ETP net new assets by type of exposure (continued)


Exposure# ETFs/ETPs

ADV(US$ Mn)

Assets (US$ Mn)

Fixed income 201 396.8 57,076.0 (61.1) 8,275.9 9,453.3 Broad 2 4.3 551.4 76.3 460.5 102.3 Corporate 16 68.5 10,765.8 (404.7) 2,400.8 4,770.8 Covered 8 3.9 1,019.0 (17.7) 360.3 438.4 Credit spreads 13 8.4 873.7 (65.3) (25.3) (291.1) Government 131 196.5 30,966.7 315.9 5,734.8 6,193.2 High yield 1 7.7 477.0 131.2 472.8 - Inflation 16 20.3 4,132.1 4.8 (122.4) 2,365.8 Money market 13 81.5 6,643.7 (53.5) (999.2) (4,518.2) Mortgage 1 5.8 1,646.6 (48.2) (6.4) 392.1

Commodities 498 407.1 56,721.6 1,106.1 9,403.0 13,657.9 Broad 72 44.0 8,291.2 389.3 1,707.0 2,985.9 Agriculture 115 32.8 4,733.7 100.1 (379.6) 1,294.3 Energy 101 48.7 4,254.1 (83.7) 510.0 1,834.2 Industrial metals 76 16.4 2,082.5 61.9 330.5 343.5 Livestock 23 0.9 128.2 (1.1) 14.5 29.4 Precious metals 111 264.2 37,232.0 639.5 7,220.6 7,170.7

Currency 78 5.2 585.5 33.3 344.7 190.7 Alternative 13 12.2 1,631.7 23.7 707.7 898.6 Mixed (equity & fixed income) 1 0.5 111.2 3.7 35.4 14.8

Total 1,592 3,505.8 315,332.1 4,911.4 50,238.9 56,838.1

NNA (US$ Mn)

2010 NNA(US$ Mn)

2009 NNA(US$ Mn)

Dec-10


STOXX 600 Sector ETF net flows: week ending 31 December 2010

Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

• The week ending 31 December saw $54.0 Mn net inflows to STOXX Europe 600 sector ETFs.

• The largest sector ETF net inflows in the week ending 31 December 2010 were in healthcare with US$36.9 Mn followed by industrial goods and services with US$24.5 Mn net inflows while chemicals experienced net outflows of US$21.7 Mn.

• In 2010, STOXX Europe 600 sector ETFs saw US$120.0 Mn net outflows.

• Basic resources saw the largest net outflows with US$223.3 Mn, followed by food and beverage with US$179.2 Mn net outflows while personal and household goods experienced the largest net inflows with US$122.7 Mn.

#stocks

%weight Weekly Rank YTD Rank 31-Dec-10

YTD %change

Automobiles and parts SXAR 15 2.3% -2.4% 19 35.7% 1 210.5 389.3 74.6% 4.4 -6.5 17.3 75.7

Banks SX7R 53 15.3% -1.1% 18 -15.5% 19 391.7 1,294.3 -14.8% 4.9 -10.2 -47.5 78.0

Basic resources SXPR 30 5.6% 0.7% 4 20.8% 4 330.9 1,356.9 -0.2% 18.4 9.0 -315.7 -223.3

Chemicals SX4R 22 4.3% 0.5% 6 16.8% 6 134.2 276.7 23.0% 1.3 -21.7 -35.9 18.2

Construction and materials SXOR 27 2.6% 1.5% 2 -2.7% 16 71.8 269.3 41.6% 0.4 4.0 32.0 89.1

Financial services SXFR 30 1.5% 0.7% 5 11.1% 8 19.4 89.9 13.2% 0.7 4.0 -6.5 3.4

Food and beverage SX3R 28 6.9% -0.3% 14 14.2% 7 198.1 387.0 -25.8% 0.7 3.9 -16.2 -179.2

Healthcare SXDR 35 9.2% 0.0% 11 1.9% 13 407.7 849.2 -11.8% 1.9 36.9 -41.9 -121.4

Industrial goods and services SXNR 93 9.6% 0.5% 7 26.8% 2 333.5 559.5 42.4% 2.1 24.5 -27.2 25.9

Insurance SXIR 33 5.6% 0.3% 9 -2.0% 15 164.0 557.3 -14.9% 0.6 -15.7 -22.6 -72.2

Media SXMR 28 2.3% -0.2% 12 9.6% 10 145.6 156.5 38.5% 0.1 4.0 -14.9 15.3

Oil and gas SXER 34 8.7% 0.1% 10 -3.5% 17 428.4 974.0 -6.8% 7.3 12.2 -42.2 11.0

Personal and household goods SXQR 27 5.4% -0.6% 16 22.2% 3 161.8 328.5 99.0% 1.3 4.0 50.4 122.7

Real estate SX86R 21 1.1% 1.7% 1 8.9% 11 16.8 61.5 -24.4% 0.1 0.0 -1.0 -21.8

Retail SXRR 25 3.6% -0.6% 15 6.1% 12 102.7 254.1 42.1% 0.4 5.3 32.8 78.2

Technology SX8R 26 2.9% 1.2% 3 11.0% 9 64.0 210.8 8.6% 0.2 -3.8 -24.9 -1.7

Telecommunications SXKR 20 6.0% -0.9% 17 1.6% 14 248.0 688.9 -21.4% 4.6 -4.5 -118.3 -153.6

Travel and leisure SXTR 23 1.3% 0.3% 8 20.0% 5 95.6 143.2 62.3% 0.3 -5.5 39.7 41.1

Utilities SX6R 31 5.7% -0.3% 13 -10.8% 18 257.2 702.0 -2.0% 5.1 14.0 12.0 94.8

Total 601 100.0% -0.1% 5.1% 3,781.8 9,549.0 -0.4% 55.0 54.0 -530.6 -120.0

Sector Ticker

STOXX 600ETF

5-day ADV(US$ Mn)

YTD ETF net flows (US$ Mn)

US$ total return performanceWeekly ETF net

flows(US$ Mn)

MTD ETF net flows (US$ Mn)

ETF AUM (US$ Mn)Futures open

interest (US$ Mn)


Asian institutions build out investment capabilities

• Asian institutions’ appetite for using external asset managers is growing slowly with the recovery in global markets.

• Although a recent flurry of RFPs marked a resumption in manager hiring after a near dead-stop during the market crisis, institutional investors in Asia continue to build out their own investment management capabilities with an eye towards internalising assets for specific investment strategies.

• In addition, Asian institutions are not planning to limit their internal management to passive strategies; many are looking to go toe to toe with external managers in active strategies with the goal of generating alpha.

• These conclusions are drawn from the results of Greenwich Associates’ 2010 Asian Investment Management Study1, in which 84 of the largest institutional investors in Hong Kong, Macau, China, Taiwan, South Korea, Singapore and other Asian countries were interviewed.

• These institutions together manage some $5 trillion in assets, a sum that was roughly unchanged from 2009 to 2010.

• About one third of Asian institutions use ETFs as part of their investment strategies.

• ETFs are most widely employed due to their relatively high levels of liquidity and flexibility, and for their ability to provide institutions with a means of accessing specific investment strategies or exposures.

1. Greenwich Associates conducted interviews with 84 of the largest institutions in Brunei, China, Hong Kong/Macau, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand. Interview topics included asset allocation, product fees paid and compensation.

Source: Greenwich Associates: Asian Institutions Build Out Internal Investment Capabilities, Asian Investment Management June 2010.


ETFs gain foothold in institutional market

1. Greenwich Associates surveyed U.S. pension funds, endowments, foundations, and money managers that identified themselves as ETF users. Seventy institutions participated in the survey, including 43 plan sponsors and 27 money managers. The survey was conducted from 8 March to 16 March 2010.

2. Based on responses from 70 U.S. plan sponsors and money managers using ETFs. Source 2010 Greenwich Market Pulse – ETFs.Source: Greenwich Associates: ETFs Gain Foothold in Institutional Market, April 2010. 2010 Greenwich Market Pulse – ETFs.

• In the United States, where ETFs are most commonly thought of as a retail product, institutional investors are finding that ETFs can be helpful tools for cash equitisation, transition management, rebalancing, and obtaining hard to achieve exposures.

• According to a recent survey by Greenwich Associates1, ETF use among United States pension funds, endowments and foundations has grown to about 14%, according to the results of Greenwich Associates’ most recent annual study of the United States investment management market.

• Despite that relatively modest share, institutions actually represent roughly half the assets invested in ETFs in the United States according to recent industry estimates.

• Almost half the institutional users in the Greenwich Associates annual study say they employ ETFs for what they consider ‘tactical’ tasks related to the management of their portfolios.

• Approximately 20% of institutional ETF users say they employ the funds to implement ‘strategic or long-term’ investment decisions, and an equal share report that they use ETFs for both tactical and strategic purposes.

• Greenwich Associates asked the institutions participating in the survey to name the providers they use for ETFs. The results revealed the following:

– iShares/BlackRock is by far the most widely used provider of ETFs among United States institutions; and

– Most institutions that employ ETFs use more than one provider: 89% of institutional ETF users obtain ETFs from iShares/BlackRock, whereas 60% use SPDRs/State Street and 51% use Vanguard.

How ETFs are used by United States Institutions2

56%

31%

63%

19%

31%

25%

25%

6%

45%

38%

31%

28%

24%

24%

3%

3%

0% 15% 30% 45% 60% 75% 90% 105%

Plan sponsors Money managers

Tactical adjustments

Transitions

Cash equitisation

Core/satellite

Rebalancing

Portfolio completion

ETF overlay

Other


ETFs gain foothold in institutional market (continued)

1. Based on responses from 70 United States plan sponsors and money managers using ETFs.Source: Greenwich Associates: ETFs Gain Foothold in Institutional Market, April 2010. 2010 Greenwich Market Pulse – ETFs.

• Institutions cite a range of criteria used in selecting an ETF provider.

• In addition to the obvious consideration of fees, institutions rank four factors as particularly important in selecting an ETF provider: liquidity, benchmark, the track record of the fund, and reputation of the company behind the fund.

• Almost 55% of institutions currently employing ETFs expect their usage of the product to increase in the next three years, including nearly 20% that expect the amount of assets dedicated to ETFs to grow by 5–10% in that period.

• Money managers are slightly more apt to predict an increasein use: approximately 65% expect to be devoting more assetsto ETFs in the next 12 months, compared with half of plan sponsors.

• About 20% of plan sponsors expect to reduce their use of ETFs.

• Nearly 30% of institutions that do not use ETFs say they lack familiarity with the product.

• One way to address this lack of information would be for providers to win over investment consultants, who would then be in a position to explain the product to their institutional clients as both a tool for tactical adjustments and a means of obtaining desired exposures.

• The results of this recent Greenwich Market Pulse suggest that many investment consultants are not currently recommending ETFs or even initiating discussions with their clients about the product.

Expected change in asset allocation to ETFs1

10%

18%

25%

33%

(8%)

(5%)

(3%)

(20%) (10%) 0% 10% 20% 30% 40%

Increase >10%

Increase 5%–10%

Increase 1%–4%

No change

Decrease -1%–4%

Decrease -5%–10%

Decrease >-10%


Source: Global ETF Research and Implementation Strategy Team, BlackRock, Thomson Reuters.

Global institutions reported assets: as at end December 2008

All reporting firms Reported ETF users % of ETF users

Firm reported assets#

institutionsReported assets

(US$ Mn)#

institutionsReported ETF

assets (US$ Mn)#


assets (US$ Mn)>50 Bn 39 5,404,681 28 68,250 71.8% 1.3%20-50 Bn 113 3,505,831 84 69,810 74.3% 2.0%10-20 Bn 125 1,763,371 71 35,571 56.8% 2.0%5-10 Bn 205 1,481,979 98 15,356 47.8% 1.0%1-5 Bn 1,216 2,638,240 428 41,249 35.2% 1.6%500-1000 Mn 864 610,428 246 14,123 28.5% 2.3%250-500 Mn 1,196 421,369 323 13,359 27.0% 3.2%100-250 Mn 2,141 345,296 535 11,739 25.0% 3.4%<100 Mn 31,542 303,393 686 4,710 2.2% 1.6%Total 37,441 16,474,589 2,499 274,167 6.7% 1.7%

All reporting firms Reported ETF users % of ETF users

Firm type#

institutionsReported assets

(US$ Mn)#


assets (US$ Mn)#


assets (US$ Mn)Investment managers 7,061 11,817,584 2,443 176,880 34.6% 1.5%

Bank and trust 493 419,345 158 15,959 32.0% 3.8%Endowment fund 17 11,477 8 1,811 47.1% 15.8%Finance company 2 6 – – 0.0% 0.0%Foundation 44 11,043 2 4 4.5% 0.0%Hedge fund 1,030 349,620 356 14,194 34.6% 4.1%Insurance company 136 160,902 16 1,670 11.8% 1.0%Investment advisor 4,462 10,209,252 1,857 134,501 41.6% 1.3%Pension fund 226 553,665 38 8,692 16.8% 1.6%Private equity 331 41,858 7 21 2.1% 0.0%Sovereign wealth fund 15 45,210 1 28 6.7% 0.1%Venture capital 305 15,206 – – 0.0% 0.0%

Brokerage firms 143 338,226 45 86,869 31.5% 25.7%Strategic entities 30,237 4,318,779 11 10,418 0.0% 0.2%

Holding company 501 254,762 5 3,210 1.0% 1.3%Government agency 97 640,813 – – 0.0% 0.0%Corporation 29,639 3,423,204 6 7,207 0.0% 0.2%

Total 37,441 16,474,589 2,499 274,167 6.7% 1.7%


Charles Schwab, ETF Investor Snapshot: Q3 2010

ETF Assets at Schwab: $100B (30% 12-Month Growth)

13%

31%

56%

12%

37%

51%

Sept ’09 Sept ’10

Growth

24%

57%

17%

ETF Trends at Schwab: ETF assets custodied at Schwab have grown to $100 billion, up 30%

over the past year and 14% in the past quarter. Retail Investor ETF assets have grown 57% and now account for 37% of the total ETF assets at Schwab.

12-month combined Retail flows outpaced RIA Client flows; flowsare 53% for all Retail and 47% for RIA Clients.

While only 9% of total ETF assets, the top 5 ETFs in terms of Q3 2010 flows account for over 25% of all ETF flows for the quarter.

RIA Clients

Retail Investors

Retail Traders

$100B

$76B

Source Charles Schwab, ETF Investor Snapshot: Q3 2010 Information and insights contained in this Snapshot are based upon analysis of Exchange-Traded Funds (ETFs), regardless of ETF issuer or distributer, custodied at Charles Schwab & Co., Inc., and include both Schwab individual investor clients and clients working with an independent RIA who uses Schwab RIA Client services


Charles Schwab, ETF Investor Snapshot: Q3 2010

Source Charles Schwab, ETF Investor Snapshot: Q3 2010 Information and insights contained in this Snapshot are based upon analysis of Exchange-Traded Funds (ETFs), regardless of ETF issuer or distributer, custodied at Charles Schwab & Co., Inc., and include both Schwab individual investor clients and clients working with an independent RIA who uses Schwab RIA Client services


BARCLAYS STOCKBROKERS

CLIENTS SIGNIFICANTLY INCREASE INVESTMENT IN ETFs

Value of ETFs that are held in client accounts up 330% since September 2008

Average deal size has increased by 88%

Volume of assets invested on a monthly basis has increased by 60%

Number of client accounts holding ETFs has more than doubled, with each of these accounts holding two or more different ETF products.

In 2008, fixed income ETFs accounted for half of the monthly top ten traded products, and the iShares FTSE 100 accounted for more than 34% of all purchases.

.

Top 10 ETF purchases by Barclays Stockbrokers Clients, September 2010:

ETF % of Purchases ETFS FTSE 100 Super Short Strategy (2x) 19% iShares FTSE 100 15% db x-trackers FTSE 100 Short 5% iShares MSCI Emerging Markets 4% ETFS FTSE 100 Leveraged (2x) 4% iShares S&P 500 3% iShares FTSE/ Xinhua China 25 3% iShares MSCI Brazil 3% iShares FTSE UK Dividend Plus 3% iShares IBOXX £ Corporate Bond 3%

Source: Barclays Stockbrokers November 18, 2010 press release. Barclays Stockbrokers is the UK’s largest execution-only retail broker, offering retail investors a wide range of products including shares, funds, ETFs, CFDs, Structured Products, Financial Spread Trading, covered warrants, trading BARXdirect: FX, and investment accounts like PensionMaster (SIPP) and ISAs. Barclays Stockbrokers enables investors to trade in both certificated and nominee shares


Barclays Wealth Global Beta

Dynamic management of the asset mix

Barclays Wealth manage the mix of assets and select the individual ETFs

The longer term strategic asset allocation is typically reviewed every

12-18 months

Also, based on short-term views of markets (generally assessed over 3-6 months), tactical adjustments can be made to the asset allocation with the

objective of generating additional returns

The asset mix includes only six of Barclays Wealth’s nine defined asset

classes

Global Beta provides exposure to the traditional asset classes with other

products used to access the alternative asset classes

Tactical Adjustments

Adjustments to the asset allocation based on our short-term market views

ETF Allocations

ETFs are used to gain exposure to each of the asset types

Asset allocation

Quantitatively-led global assetallocation across all risk profiles

Developed Government Bonds

Investment Grade Bonds

High Yield & Emerging Markets Bonds

Developed Markets Equities

Emerging Markets Equities

Cash & Short Maturity Bonds

Global Beta is a globally diversified fund-of-funds product with exchange-traded funds as its building blocks. Barclays Wealth offers five portfolios designed to meet a range of risk-return preferences, each available in three currencies (GBP, EUR, USD). All portfolios are based in Luxembourg and all are fully hedged to provide investors with protection against currency risk.

Distributed exclusively through Barclays Wealth

Assets under management (as at 30 October 2010) across the five

portfolios is £840 million

Source: Barclays Wealth


Barclays Wealth Global Markets

Dynamic managementof the asset mix

Barclays Wealth manage the mix of assets and select the individual

ETFs

The longer term strategic asset allocation is typically reviewed every

12-18 months

Also, based on short-term views of markets (generally assessed over 3-6 months), tactical adjustments can be made to the asset allocation with

the objective of generating additional returns

The asset mix includes all nine of Barclays Wealth’s defined asset

classes

Global Markets, like Global Beta is a globally diversified fund-of-funds product with exchange-traded funds as its building blocks. There are five Sterling denominated portfolios designed to meet a range of risk-return preferences. All portfolios are based in the UK and all are fully hedged to provide investors with protection against currency risk.

Distribution

Global Markets was launched in September 2010

The portfolios are available through Barclays Wealth and a range of UK

fund platforms

Source: Barclays Wealth


Fixed income ETF and ETP asset growth


Assets (US$ Bn) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 YE-2010

ETF/ETP assets $0.1 $0.1 $4.0 $5.9 $11.1 $21.7 $35.9 $60.0 $103.9 $167.1 $207.4

# ETFs/ETPs 2 2 6 17 22 31 51 122 173 295 409

0

50

100

150

200

250

Assets US$ Bn

0

50

100

150

200

250

300

350

400

450

# products


Global commodity ETF and ETP asset growth


Assets (US$ Bn) 2001 2002 2003 2004 2005 2006 2007 2008 2009 YE-2010Agriculture - - - - - $0.0 $2.9 $2.9 $7.7 $11.6Alternative - - - - - - - $0.0 $0.0 $0.0Broad - - - - $0.4 $3.5 $7.6 $5.2 $15.2 $20.9Energy - - - - $0.1 $1.0 $1.5 $5.0 $14.2 $13.1Livestock - - - - - $0.0 $0.0 $0.2 $0.2 $0.2Industrial metals - - - - - $0.0 $0.4 $0.3 $1.9 $4.2Precious metals $0.0 $0.1 $0.3 $2.6 $6.5 $15.5 $28.8 $41.3 $80.8 $134.9ETF/ETP total $0.0 $0.1 $0.3 $2.6 $7.0 $20.1 $41.3 $54.9 $120.0 $184.8

# ETFs/ETPsAgriculture - - - - - 10 27 85 96 133Alternative - - - - - - - 3 2 2Broad - - - - 1 14 30 52 62 101Energy - - - - 1 10 37 79 92 136Livestock - - - - - 3 7 20 20 24Industrial metals - - - - - 6 12 54 64 102Precious metals 1 1 2 5 6 13 34 71 98 184Total ETFs/ETPs 1 1 2 5 8 56 147 364 434 682

0

20

40

60

80

100

120

140

160

180

200

Assets US$ Bn

0

100

200

300

400

500

600

700

# products


European ETF asset growth: physical and synthetic replication

Synthetic replication refers to the use of derivatives to replicate the index performance such as swaps, futures, forwards, options etc. Physical replication refers to the use of physical securities such as stocks, bonds and commodities to generate the index performance. Hybrid replication refers to a combination of both physical and synthetic products. Data as at year end 2010.Source: Global ETF Research and Implementation Strategy Team, BlackRock, Bloomberg.

Assets (US$ Bn) 2005 2006 2007 2008 2009 YE-2010

Physical $41.3 $64.1 $80.6 $76.4 $125.0 $155.1

Synthetic $13.6 $25.6 $48.0 $66.4 $101.9 $128.6

Hybrid - - - - - $0.3

ETF AUM total $54.9 $89.7 $128.5 $142.7 $226.9 $284.0

Physical 138 184 231 252 314 385

Synthetic 27 89 192 383 515 683

Hybrid - - - - - 3

# ETFs total 165 273 423 635 829 1,071

0

50

100

150

200

250

300

Assets US$ Bn

0

100

200

300

400

500

600

700

# ETFs

+63.3%

+11.1%

+43.3%

+59.0%

+25.2%


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